UK Government debt hits £2tn amid coronavirus pandemic

The UK government debt at the end of July 2020 was £2, 004 trillion, £ 227.6bn more than at the same point last year according to the Office for National Statistics (ONS), which means the entire value of the country’s economy for the first time in 60 years.

The Government owes the equivalent of 100.5 per cent of gross domestic product (GDP)- the total value of all the goods and services produced in the economy for the first time since the 1960-61 financial year the ONS said.

The government borrowed £26.7bn in July, down from a revised £29.5bn in June,  pushing the borrowing in the year to date to $150.5bn close to the deficit for the whole of 2009-10 of $158.3bn as the coronavirus pandemic took its toll on the public finances.

Looking ahead borrowing looks set to jump temporarily in August, as the government makes the second and last Self-Employment Income Support Scheme payment and funds the Eat Out to Help Out Scheme. Thereafter, it will decline, as the Coronavirus Job Retention Scheme, which cost $6.9bn to operate in July is wound down ahead of its closure at the end of October, and firms make a huge VAT payment in March, for sales generated in Q2 as well as in that month.

Borrowing for this financial year expected to be about 17 per cent of GDP.